Category Archives: Tax Debt

It is somewhat of a growing trend to see the tax strategies of major multinational companies, as well as wealthy individuals, being brought into question. Such has been the focus on this issue, that it even led to the French Actor, Gérard Depardieu, giving up his French citizenship and later being given the opportunity of becoming a Russian citizen by Vladimir Putin. In recent weeks, the focus has fallen onto tech giants, Apple.

Now Apple isn’t just a supplier of the latest must-have accessories to design grads, freelance writers and regular Starbucks frequenters – they are also the most valuable company in the world. Nobody has accused Apple of partaking in any illegal tax evasion activities, but rather the have been finger-pointed for taking advantage of flaws in the US tax system.

Immoral Tax Activities

The accusation against Apple is that they have avoided paying over US$13 Billion, over the past two years, by implementing a complex scheme, involving their Irish subsidiaries. Although this amount of money would not have a huge impact on the US budget deficit, it is felt that, as the most valuable company in the world, it is important to make an example of Apple, in illustrating that even the world’s largest companies can’t avoid paying the full amount of taxes.

It is not only Apple who have been investigated in the world of computing either, but also both Hewlett Packard and Microsoft.

Fair’s Fair?

Tim Cook, the CEO of Apple, has, however, stated that they do currently pay every single dollar of tax that they are accountable for and are indeed the United States’ largest corporate taxpayer. He further went on to suggest that with current tax rates so high, they have no intention of bringing all of the money they make back to the US and said this was aligned to the responsibility they have towards shareholders in limiting tax expenditure.

Apple have been exploiting deviances in the tax laws of Ireland and the US, with regards to residency. In the US, any company established there is deemed as being a tax resident, this is not, however, the case in Ireland. Apple state that all they are doing is refusing to bring back profits made overseas to the US, in order to resist against the 35% tax charge – an approach they say is repeated in numerous multinational companies.

The Proposed Solution

The cries from the Republican side suggest that the tax rates on money made overseas should be relaxed, in order to encourage companies to bring those profits to the US. They suggest that this too would convince companies to invest more in the US, rather than seeking more profitable pastures elsewhere.

There is also the suggestion that certain tax laws need to be reworded and loopholes removed, in order to avoid companies taking advantage of their flaws. Fundamentally, Apple is currently facing only moral questioning, as opposed to legal accusations and, thus, until something is changed, there is nothing to suggest that they will be persuaded to shift their approach.

What do you do when there is an invalid charged-off debt?

It’s nothing new to hear or see a dispute between the tax payers and the IRS. Of course, there are quite a few reasons behind the disputes, but most commonly these disputes involve examination and/or collection issues and also the different interpretations of tax law. The IRS reporting a charged-off account on the credit report also proves to be a great hassle for more reasons than one. Now, if you happen to be one of those whose credit report shows charged-off tax accounts and that too having been reported by the IRS, then it’s definitely worth disputing. In fact, if you sit on it without taking heed, then this’ll definitely have a negative impact on your credit rating and that can be far worse than not having accrued debt, yet souring your credit.

What’s a charge-off debt actually?

Before you get into surmises about what exactly charged-off debt is all about, it’s important for you to understand the concept behind a charged-off debt in the first place. A charge-off debt actually happens to be that debt which has been determined uncollectible by the original creditor and that’s usually done after the debtor is seriously delinquent. Now, it’s only after 6 months that charge-offs are known to occur. Moreover, creditors still have the right to collect on the charge-offs because the debt still remains valid. Charge-offs are also known to appear on your credit report at least for 7 years since the debt appears.

Hence, it’s obvious that you’d like to validate your debts before coming to any conclusion about whether or not you should dispute the charge-offs. Debt validation is necessary like you do when going for the programs aimed to solve your financial problems. In this case too, debt validation programs serve the purpose of telling you for sure whether or not you can dispute the charged-off account with the IRS.

How’ll you dispute a charged-off debt with the IRS?

As a taxpayer who’s looking to dispute a charged-off debt, it’s rather important that you evaluate all possible options before taking any conclusive steps. Have a look at the steps discussed below and you should know how you can dispute a charged-off debt with the IRS.

Write out a formal protest: The very first thing you should do is write out a formal protest and request a review with the IRS Appeals Office. If an issue arises, then the IRS is bound to issue a Notice of Proposed Adjustment (NOPA), Form 5701 which details the position of the IRS regarding particular financial matters. You might as well reply to this by citing tax laws and other substantial evidences to support your position.

Review alternative dispute methods: You should also try and review alternative dispute methods that might be available. Generally there are 4 alternate dispute resolution tools available at the IRS Appeals Office – early referral to appeals, fast track settlement, post appeals mediation and delegation orders. You can request the tax office for early referral to the Appeals Office.

Look for the best method: It’s always advisable that you peruse for the best method when it comes to your particular case of disputing charged-off accounts. Advisably since it’s a dispute, hence you might as well take the assistance of a tax professional. The ultimate option of course remains litigation in a tax court or federal district court.

Keep in mind the above instances and steps when looking to dispute your charged-off debts with the IRS for unless you’re sure about what you’re doing, things can get even messier ultimately. Take heed now and conclude things smoothly.

Tips to Settle Your Tax Debt on Your Own

Want to settle your tax debt on your own? Here are few tips for you.

Wipe our Debt (Photo credit: Images_of_Money)

Very first tip is to keep very clear communication; always keep IRS well informed about your current situation. Give them a clear picture of things that you have in hand. This could help them in getting things in place for you.

Next is, get a professional to hold the IRS, once that you have informed about your situation, you need to start collecting resources. There are legal ways to settle on your tax debt; however it is not easy to get the IRS to categorize you as uncollectable. This is reason why it’s essential that you give time in investing in an appropriate tax specialist, who will be able to file all the necessary forms. Probability of your success will improve greatly by hiring a specialist, so if you are thinking of pursuing this by yourself, it’s definitely not a good idea. If you are wandering for where to find this specialist, here is tip number 3 for you.

Use the Internet to find a specialist for you, looking for a good tax professional who will help you settle your tax debt is easier if you search them online. Here you will have a bigger pool of experts to choose from, and the competition between them means you can save lot in the fee amount. Also the online tax professionals are cheaper than that of offline specialists. One more reason for not hiring offline specialists is the excessive fee amount that they charge; usually it is effort to cover up the high costs they incur in running their own businesses.